Sedwitz v. Arnold

Wendel, Ch. J. Motion for summary judgment is granted. The answer of defendants is stricken out and judgment awarded [893] plaintiff against defendants as demanded in the complaint. Execution stayed until five days after notice of entry of judgment on the attorneys for the defendants. It is settled law that the acceptance by a creditor of the promissory note of his debtor for his antecedent debt does not extinguish it unless the note is paid. It is not an absolute but a conditional payment of the debt. A clear agreement by the creditor that he will take the risk of the payment of the note and that the debt is discharged thereby or the indubitable intention of both the parties to that effect is requisite to extinguish a debt by the taking of the debtor’s note. An agreement that a debt shall be paid by the note of the debtor is a contract for an extension of the time of payment and that the debt shall be paid or that it has been paid by the note of the debtor on condition that the note is paid but not otherwise. (See Leschen & Sons Rope Co. v. Mayflower G. M. & R. Co., 173 Fed. 855. See, also, 35 L. R. A. [N. S.] 1, with notes of New York cases to the same effect.) No facts are submitted by the defendants showing that the intention of the parties was that the obligation of the debtor was to be paid by the giving of the notes and hence there is no rebuttal of the strong presumption that the parties did not so intend and that the debt was not extinguished by the notes. Order filed.